COE premium for goods vehicles soars

A month after hitting a six-year low, the certificate of entitlement (COE) premium for commercial vehicles jumped by around 25 per cent yesterday.

While the COE prices for other categories of vehicles ended mostly lower, the premium for commercial vehicles closed at $38,501, up from the previous price of $30,600.

Mr Neo Nam Heng, chairman of diversified motor group Prime, said this was a spillover effect from early May, when the COE price for goods vehicles dropped to $26,029, driving up demand. The price had dropped to $26,501 in April.

Still, the latest COE premium for good vehicles is lower than that in February, when it hit nearly $50,000.

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Last month’s low was due to a sixfold increase in the monthly quota for goods vehicles, said Singapore Vehicle Traders Association president Michael Lim. The quota increase was due to a large number of vans, trucks and lorries reaching their 20-year statutory lifespan.

Mr Lim expects the COE price to drop in the next rounds as owners of commercial vehicles replace their older diesel vehicles with newer Euro 6 compliant ones under the early turnover scheme.

Instead of bidding for a COE, the vehicle owner pays a discounted Prevailing Quota Premium. The scheme is aimed at encouraging the adoption of cleaner vehicles.

In other vehicle categories, the downward COE price trend continued for cars up to 1, 600cc, with premiums dipping 2.8 per cent, from $46,489 to $45,201. For cars above 1,600cc, the premium dropped 5.5 per cent, from $53,001 to $50,110.

Mr Neo pointed to the June 30 deadline to apply for the private-hire car driver’s vocational licence as a possible reason for the drop in these categories.

“The demand for private-hire cars is starting to decline,” he said.

The COE premium for the open category dropped from $52,000 to $50,526, while the motorcycle COE price remained at $6,101.